The development of DFS in Europe is a great opportunity. However, it also raises various new issues, including that, once more, the market has moved much more quickly than domestic legislators.

Therefore, if iGaming is legal in Europe, unlike in the United States, DFS operators currently have no choice than to apply for, and operate with, a sports betting licence, by default. An example of this would be a pool betting license in the UK. As a consequence, the DFS operator will legally be treated as if it is a sportsbook or a casino, when they are very different types of business.

The resulting situation is that the legal framework is unsuitable for daily fantasy sports operators and their specific needs. An obvious example is that DFS companies operating under a European licence are unable to accept American customers, even though DFS is legal in most U.S. states. This means that the licence prevents companies from offering services to customers that are legally allowed to use them! Kafkaesque!

What are we expecting from a DFS licence?

No. 1: To be a real skill game licence
One of the most compelling parts of fantasy sports games is the competitive element of proving to your peers that you hold a greater knowledge of sports than they do. Therefore, it is vital that the game results are as close a match as possible to the reality on the pitch, because a random result is simply unacceptable. If fantasy were not a skill game then it would lose all of its purpose and its fun.

A significant problem for the sector is that many new entrants into the market place face the temptation of not delivering the implicit promise that they are making to their prospects and customers. It is not an easy promise to keep. Any companies that do not deliver an accurate game that closely matches the reality of real life sports might severely damage the sector, because customers will see DFS as being fraudulent.

Legislators should select operators very carefully, based on the quality of their game and scoring system. The accuracy of a DFS game should be of paramount importance. The main purpose of a regulator and licence is to protect customers.

A DFS licence should only be granted to companies that can prove that their game is a real skill game. A DFS licence should only allow games that have been proven to be skill games to offer white label versions to third parties. At OulalaGames we offer one of the few that is currently available to the market, but soon many companies will want to deploy their game through partnerships.

Oulala fantasy football game is a great example of this. We worked with statisticians for six months to build our scoring system and then tested our game for two years before we launched as a monetized version. Those two years of testing means that we have data that proves that we have created a skill game!

No.2: To protect the integrity of the ecosystem
The primary role of daily fantasy sports is as a social game. Of course, DFS is also a monetized game, but for the long-term health of its ecosystem, money should not become the only purpose.

Proper legislation is in the interests of both the operators and the players. Legislation should prevent the system from failing in the same ways that poker did, for example the professional sharks eating all the fishes. In other words, the system should not allow professional players to have any unfair advantages over casual players.
Without getting into specific details, here are two basic measures that can be implemented to protect the system:
– Amounts available to be won in a league should be capped at a lower level. We use 200€ on Oulala but it could be a different number (see bellow). If the amounts to be won are relatively small, professional players will be much less tempted to invest their time into something with an insignificant financial return.
– Customers should not be allowed to use tools to make automated changes in their teams. For example, if a player is injured at the last minute and is in many of your teams, you should not be allowed to use software to make those changes for you.

As might be imagined, there is a much longer and more complex list of proposals for any license. Despite this, it is clear that DFS is very different to traditional betting and that a specific license is required.

At Oulala we have already spoken to European legislators about our sector’s needs. As usual, Malta was the first country to react positively to our suggestions and later this year the MGA will launch a specific skill game license. This is great news for DFS and for Malta. Oulala was born in Malta and once again, we are proud of it!

We are also in the process of creating an International Fantasy Sports Association. One of its goals will be to highlight that by offering a specific licence for our sector, European countries will benefit from the growth of this new sector.

It is critical for our very young industry that legislators adapt their legal and fiscal systems to better serve our new sector. Europe is at the very beginning of this journey and licensing would help to make the road to be followed clearer. It’s a fascinating challenge for all of us!